Rampell: Can China build an anti-U.S. alliance?

By Catherine Rampell The Washington Post

Thursday

Jul 12, 2018 at 12:01 AM

President Donald Trump is right about one thing. China really has been stealing many of America's most valuable ideas.

For years, the Chinese government turned a blind eye to counterfeited U.S. luxury goods, bootlegged Hollywood films, fake Apple stores, trade secrets pilfered from cutting-edge U.S. tech companies. It forced U.S. firms to hand over their technology if they wanted to operate in China.

Now the Chinese government has decided to borrow one of our best foreign policy ideas, too: banding together with allies to punish a cheating, trade-obstructing bully.

On Friday, the Trump administration is slated to unilaterally impose tariffs on $34 billion worth of Chinese goods. Trump has said additional tariffs on hundreds of billions in Chinese goods are in the pipeline, too.

Alas, the tariffs going into effect Friday will probably punish us and our allies more than they'll hurt China. Because of some poor choices by Trump trade officials, the tariffs mostly miss Chinese companies and instead target U.S. and other non-Chinese multinational corporations operating in China, according to an analysis from the Peterson Institute for International Economics.

Nonetheless, the Chinese government feels it must respond to this and Trump's other big, bad protectionist measures. So, it's doing two big things.

First, it's retaliating with tit-for-tat tariffs on U.S.-made products, including soybeans, cars, pork, dairy and other goods disproportionately made in Trump Country.

Those retaliatory tariffs are slated to take effect Friday, after Trump's tariffs go into effect. That's no accident. China wants to be seen as a counterpuncher, rather than the aggressor in this dispute.

"China absolutely won't fire the first shot," China's cabinet said in a statement.

Second, China is trying to leverage its purported victimhood to isolate the United States -- and rally Trump's other trade-war victims into a new anti-American alliance.

China has been urging the European Union to issue a strong joint statement against Trump's trade policies at a summit scheduled for this month, Reuters reported.

More publicly, last month the Chinese Commerce Ministry condemned Trump's trade war and called "on all countries to take joint action, resolutely put an end to this outdated and regressive behavior, and firmly defend the common interests of mankind."

And of course last year, at the Global Economic Forum in Davos, Switzerland, Chinese President Xi Jinping offered up a rousing defense of globalization -- and a (rather presumptuous) suggestion that China, rather than the United States, is the new champion of free trade.

"We must promote trade and investment, liberalization and facilitation through opening up -- and say no to protectionism," Xi said.

If this all sounds vaguely familiar, it's because China's strategy is very similar to the one the United States had not long ago devised ... to keep China in line.

That's right. Before the misfired tariffs and countertariffs and counter-countertariffs, the United States had an actual plan for dealing with China's misbehavior.

It involved marshaling some of the many other countries harmed by China's trade barriers and intellectual property theft. After all, U.S. companies weren't the only victims of China's abusive trade practices; businesses and workers across Europe, Japan, Canada, Australia and elsewhere had long been complaining, too.

And so they formed the Trans-Pacific Partnership. This 12-party trade pact, signed in 2016, was designed to liberalize trade among the countries that were signatories, yes. But it was also explicitly about containing China's influence, and preventing Beijing from writing the "rules of the road" on intellectual property, labor and environmental standards.

In other words, it was about forming what Trump's economic adviser Larry Kudlow might term a "trade coalition of the willing" against China.

One of Trump's first acts in office, however, was to withdraw us from this pact. Since then, he has done his darnedest to alienate pretty much everyone, through insults and misdirected tariffs, as well as threats of further escalation.

The Europeans have so far reportedly rejected Chinese overtures. But it's clear our unilateralism and contempt for international trade rules have given China an opening that should never have existed in the first place, especially since Europe has virtually the same complaints about Chinese trade practices that we do.

Meanwhile, Trump's temper tantrum seems to have driven China closer to other countries it has had strained relationships with, such as India and Japan.

Trump has also unwittingly given a shot of adrenaline to the 16-party Asian regional trade deal that would cover half the world's economy. Unlike the TPP, the United States is not a party to these negotiations -- but China is.

Clearly, Beijing knows a good idea when it sees one.

Catherine Rampell (crampell@washpost.com) is a columnist for The Washington Post.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.